Reflections on the Commercial Payments Conference
30 March 2012
I was lucky enough to speak at the Commercial Cards & Payments Conference in New York last week. May I congratulate Joanne, the organiser, on a great event. I spoke about a topic dear to heart - SEPA, and gave a snapshot of my recent report The SEPA Ripple Effect - Impacting a Non-European Country Near You Soon
, with a particular focus on the opportunities for US banks. The response, as always, interesting, ranging from "I'm sure if was as important as you say, I'd would have heard about it" to "why did you have to go let the cat out of the bag!" Of the other presentations, a few were stand-outs, but some posed as many questions as answers to me. In particular, I was somewhat perturbed by comments from a global but US headquartered firm. They're actively pushing commercial cards as their preferred method to receive payment. We're not just talking the usual t&e approach here, but for goods and services worth $x0,000's. They perceive that the ACH doesn't have the functionality (and in particular remittance data) that a card can offer them. This raises several points. Firstly, to misquote George Orwell terribly, not all ACHs are created equal. In the world of ACH, there are some very clear differences on a country by country basis in functionality and speed provided. The US system has taken a course of low functionality and speed, but at almost unparalleled low cost. Other ACHs take a view that the greater functionality (and therefore cost) generates far more value than the alternative "thin" approach. Its a difficult call. In this case, the corporate was paying substantially more, but receiving they believe better value. Is this a missed opportunity for ACH? Which leads to the second point. I saw many friends from cards world, a number of whom were from sponsors. And how many friends from the ACH world did I see....? We talk about the war on cash, and about checks declining, but often forget about the direct competition between ACH and cards. It doesn't often happen, but in the corporate payments world it happens most frequently. Banks have sunk significant investments into ACH - yet its cards that are most active.